EARTHQUAKE: The Long Road Back : Week 2: Rattled, but Reopening : Stop Denying, Start Preparing for Next Crisis, Experts Warn

For many small- and medium-size businesses throughout Southern California, the denial stage--”It can’t happen to us”--was shattered a week ago today along with glass and nerves. Now is the time to get ready for the next disaster, no matter what form it takes.

Whether you are trying to put your business back together, were spared significant damage or are thanking your lucky stars that you hadn’t yet opened your planned small business, there are lessons in emergency preparedness to be learned from the Northridge earthquake.

Experts say that while smaller businesses may not have the resources to develop and implement full-scale disaster plans as larger corporations do, there are many things they can and certainly should do.

“Earthquake preparedness is very good business. It’s bottom-line stuff,” said Eliza Chan, an official with a San Francisco Bay Area office of the Earthquake Program of the Governor’s Office of Emergency Preparedness.

Chan cited statistics from the U.S. Small Business Administration showing that 28% of businesses that close after an emergency never reopen. Of those that do, about a third continue to have financial problems for the following two years.

“The thing is for business not to be closed down by emergencies,” Chan said.

Libby Lafferty, president of Lafferty & Associates, a La Canada Flintridge disaster and emergency consulting and training firm, said emergency planning should be integrated into a business.

“Something for emergency preparedness should be in the budget every year,” she said. “Then you have to exercise your plan and update it regularly.”

Here are steps suggested by various safety, earthquake and emergency planning experts:

The First Step

The most significant step in getting ready for the next crisis, Lafferty said, is the first one: Stand back and assess your company’s situation. What things are most crucial to the business? Which employees, suppliers, customers, equipment and information would be absolutely necessary to a bare-bones operation in the days immediately after a crisis? Where is the company vulnerable--its physical plant, its lack of supplies, its lack of backup systems?

Once you’ve studied your strengths and weaknesses, you have the basics for a plan of action. Your first job is to set priorities: Make sure the most important things will be preserved or duplicated; whatever needs fixing, begin now, said Ian Mitroff, director of USC’s Center for Crisis Management.

The next steps vary in cost and difficulty.

No-Cost Things

* Determine what local government and emergency agencies are prepared to do. But then count on going it alone for the first hours or days of a crisis.

“Don’t depend on these agencies to take care of you right away,” Lafferty said. “They can only do so much and might not be where you are. It’s important that everybody assume responsibility for themselves, especially for the first few days.”

* Draw up your own emergency plan. Discuss problems and options with key personnel, determine each person’s role and responsibilities and designate alternates for those people. Put together a phone tree, including each employee’s phone number and an emergency contact for each person.

Designate one phone number (preferably with an answering machine attached) for employees to call during the emergency to learn if and when they are needed to return. Decide on at least one alternate phone number or out-of-state contact (a relative will do) in case local telephone service is disrupted.

Decide on a site that could become a mini “command post,” said Bill Regensburger, director of emergency planning at USC. “Create a little checklist. You know that at the time (an emergency) happens, you’re going to forget most of the things you should do. Right now, it’s probably fresh in your mind, so write it down and put it in a red folder where everybody knows where it is.”

Steve Staudenmeir, of the computer risk management group at accounting firm Arthur Andersen, said it is vital to keep emergency plans up to date and test them regularly. “Most plans almost never work the first time,” he said.

* Talk to your customers and suppliers. Discuss the possibilities of disruption and arrange emergency communication and distribution options. Talk to your suppliers about their plans for coping with emergencies; ask about their backup systems. Know of other suppliers that can be called upon if your suppliers are knocked out of business.

* Take advantage of free services and information. Much is available from local organizations and government agencies. The Governor’s Office of Emergency Services offers workshops, brochures, handouts, posters and sample emergency plans. For these services in the Los Angeles area, call (818) 304-8383.

* Make arrangements with various contractors or professionals. Those you might need in the first hours or days of an emergency include building engineers, attorneys and accountants. Include their phone numbers on your list.

* Get to know others in your line of business. With them, you could establish a mutual aid network. Join or form an association; join a civic organization. Discuss possible emergencies and what resources could be shared if needed.

Things That Cost Little

* Obtain emergency preparedness supplies. Many cost next to nothing. There are restraints, or “lips,” that can be placed on shelves to help keep items from falling off during an earthquake; a simple wire across glass items (as in a grocery or liquor store) would help prevent much damage. Latches can keep storage doors from flying open. There are devices for keeping computer monitors securely on desks and tables. Make sure your fire extinguishers are checked regularly and that employees know how to use them.

* Review work areas and get rid of hazards. Pull down heavy items stored on upper shelves and find another spot for them. A new product clips onto heavy artwork and secures it to the wall. Bolt shelves and files to walls. Have safety plastic installed on large windows (or do it yourself) to keep the glass from shattering.

Remember that many insurers offer discounts for improved safety measures.

* Keep a certain number of emergency supplies on hand. Include first aid kits, water, flashlights or other light sources, batteries, battery-operated radios and other basic items.

* Help employees become prepared at work and at home. You could start by supplying each employee with a flashlight and emergency preparedness guidelines. Consider providing safety training. Encourage all employees to have their own away-from-home stash of emergency supplies, either at their desks or in their cars.

* If you cannot afford computer system backup services, create your own. Consider having employees keep duplicate copies of their important files at home. Routinely back up computer data and files and store these copies off-site. Some small-business managers train themselves to pop in a floppy disk at the end of each day, copy files and information and carry it home with them; your business’ data might need to be backed up only weekly.

Vital files and programs should be copied and stored in more than one spot and in fire-safe containers. Consider out-of-state storage of the most important records, USC’s Mitroff said, and remember that not just computer records should be copied; copies of important legal documents should also be stored at a safe distance.

Things That Cost More

* Consider buying backup generators (and any extension cords you might need) and cellular phones. Loss of power and telecommunications is always a threat in a natural or even human-caused disaster.

“Hot” and “cold” backup services are available, but may be too expensive and, in some cases, unnecessary. Hot sites have computer systems ready and waiting to operate for you; cold sites can be empty spaces wired and ready for computer and telecommunications systems. If your business has more than one location, you can imitate these services by distributing your data and systems among your various sites.

* Look into business interruption insurance. While such insurance does not help you recover lost time or information, such policies do cover losses of income from disasters after a prescribed period.

* If you can, consider providing employees with the resources they need to return to work. This could range from hiring cleaning crews for them to providing transportation, temporary housing, loans, food and clothing and trauma counseling.

* Consider new ways of doing business. If your assessment of your vulnerability is just plain frightening, now may be the time to implement new work methods and technologies.

It might be time to plunge into the computer age and buy that PC for yourself or the office. If your business couldn’t exist without the little printing company down the street and you’ve discovered it has no emergency plan in place, weigh that risk against the cost of your own computerized desktop publishing system. A new “notebook” computer for key employees and accounts might be less expensive in the long run than your current system.